AUSTIN, Texas, July 23 /PRNewswire-FirstCall/ -- EZCORP, Inc. (Nasdaq: EZPW) announced today results for its fiscal third quarter and nine-month period ended June 30, 2009.
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EZCORP's net income for the quarter ended June 30, 2009 increased 33% to $14.4 million ($0.29 per share) compared to $10.8 million ($0.25 per share) for the quarter ended June 30, 2008. Total revenues for the quarter increased 37% over the prior year period to $147.8 million with pawn service charges up 45% and total sales (merchandise and jewelry scrapping) up 52%. Signature loan revenues (payday loan and credit service fees) decreased $0.4 million, or 1%. Auto title loans, a new and developing product, contributed $1.0 million of revenues.
Consolidated operating income improved 32% to $21.5 million (24% of net revenues) from $16.3 million (24% of net revenues) in the prior year quarter. The Company's U.S. pawn operations contributed $6.4 million of improvement, partially offset by a $0.5 million lower contribution from the EZMONEY operations and an increase in administrative costs. Operating income from the 47-store Empeno Facil pawn segment increased 46% in Mexican pesos, or 13% after translation to a stronger U.S. dollar.
The 78 pawn stores acquired in the December quarter contributed total revenues of $35.1 million, operating income of $5.3 million, and net income of $3.2 million. The acquired stores contributed approximately $0.04 earnings per share to the quarter after the effect of shares issued in the acquisitions.
EZCORP's net income for the nine-month period ended June 30, 2009 increased 31% to $47.5 million ($1.00 per share) compared to $36.4 million ($0.84 per share) for the prior year nine-month period. Operating income for the nine months improved 29% to $71.2 million (27% of net revenues) compared to $55.1 million (27% of net revenues) for the prior year nine-month period.
Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our third quarter earnings were in line with our revised guidance, and represent our 28th consecutive quarter of year over year earnings growth. Our results reflect the successful integration of the 78 pawn stores acquired in November and December, which collectively contributed $0.04 earnings per share. These acquisitions provided $0.02 earnings per share accretion in the March quarter, and have gained momentum as they have been assimilated into our business. These results clearly demonstrate the value of our strategy to build earning assets through quality acquisitions."
Rotunda continued, "In pawn, our same store loan yield remained strong across all categories, as did our general merchandise loan growth and sales. Jewelry loan growth and jewelry sales were not as strong as seasonally expected. We recently increased our gold lending guidelines to accelerate the loan growth, and anticipate a jewelry sales benefit from several promotions, beginning with our 'Christmas in July' layaway promotion. Our EZMONEY operations enjoyed a lift from new loan products, including auto title loans introduced this year and installment loans introduced last year. The benefit of these new products largely offset the lower contribution from payday loans. We expect an increased contribution from these new products as they mature and are introduced into more of our stores."
Rotunda concluded, "We continue to expect fourth quarter earnings per share of $0.41 to $0.43, representing an increase of 11% to 16% over the prior year quarter. We expect full-year earnings per share of $1.40 to $1.42 compared to last year's $1.21, or an increase of 16% to 17%. We remain on track to open approximately 30 Mexico pawn locations by fiscal year-end, including the nine added year-to-date. We anticipate opening our first Canadian EZMONEY stores prior to the holiday season."
EZCORP is primarily a lender or provider of credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. In its pawnshops, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. In its signature loan stores and some pawnshops, the Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans.
As of June 30, 2009, EZCORP operated a total of 897 locations in the U.S. and Mexico consisting of 370 U.S. pawnshops, 47 pawnshops in Mexico and 480 U.S. signature loan stores. EZCORP, as a near-30% stockholder, is also actively involved in the management of Albemarle & Bond Holdings PLC, the U.K.'s largest pawnbroking business with 115 stores.
This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including new store expansion, anticipated benefits of acquisitions and expected future earnings. These statements are based on the Company's current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, actions of third parties who offer services and products in the Company's locations and changes in the regulatory environment. For a discussion of these and other factors affecting the Company's business and prospects, see the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.
You are invited to listen to a conference call discussing these results on July 23, 2009 at 3:30pm Central Time. The conference call can be accessed over the Internet or replayed at your convenience at the following address.
http://www.videonewswire.com/event.asp?id=60390
For additional information, contact Dan Tonissen at (512) 314-2289.
EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
-------------------------------------
Three Months
Ended June 30,
---------------
2009 2008
---- ----
1 Revenues:
2 Merchandise sales $50,442 $35,728
3 Jewelry scrapping sales 30,867 17,907
4 Pawn service charges 32,880 22,691
5 Signature loan fees 30,815 31,223
6 Auto title loan fees 1,030 -
7 Other 1,740 521
------- -------
8 Total revenues 147,774 108,070
9 Cost of goods sold:
10 Cost of merchandise sales 31,057 20,706
11 Cost of jewelry scrapping sales 19,908 10,754
------ ------
12 Total cost of goods sold 50,965 31,460
13 Bad debt:
14 Signature loan bad debt 8,618 8,545
15 Auto title loan bad debt 104 -
----- -----
16 Total bad debt 8,722 8,545
------ ------
17 Net revenue 88,087 68,065
18
19 Operations expense 53,833 39,873
20 Administrative expense 9,687 8,527
21 Depreciation and amortization 3,254 3,081
22 (Gain) / Loss on sale/disposal of assets (146) 284
------ ------
23 Operating income 21,459 16,300
24
25 Interest income (59) (165)
26 Interest expense 428 72
27 Equity in net income of unconsolidated affiliate (851) (997)
28 Other 11 11
------ ------
29 Income before income taxes 21,930 17,379
30 Income tax expense 7,545 6,552
------- -------
31 Net income $14,385 $10,827
======= =======
32
----- -----
33 Net income per share, diluted $0.29 $0.25
===== =====
34
35 Weighted average shares, diluted 49,279 43,325
EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
-------------------------------------
Nine Months Ended
June 30,
-----------------
2009 2008
---- ----
1 Revenues:
2 Merchandise sales $156,293 $120,902
3 Jewelry scrapping sales 78,609 49,570
4 Pawn service charges 92,777 67,384
5 Signature loan fees 98,409 94,917
6 Auto title loan fees 1,666 -
7 Other 4,901 1,228
------- -------
8 Total revenues 432,655 334,001
9 Cost of goods sold:
10 Cost of merchandise sales 96,348 72,122
11 Cost of jewelry scrapping sales 51,468 29,610
------- -------
12 Total cost of goods sold 147,816 101,732
13 Bad debt:
14 Signature loan bad debt 23,174 24,847
15 Auto title loan bad debt 153 -
------ ------
16 Total bad debt 23,327 24,847
------- -------
17 Net revenue 261,512 207,422
18
19 Operations expense 151,955 117,308
20 Administrative expense 29,892 25,418
21 Depreciation and amortization 9,471 9,027
22 (Gain) / Loss on sale/disposal of assets (967) 527
------ ------
23 Operating income 71,161 55,142
24
25 Interest income (257) (359)
26 Interest expense 1,064 228
27 Equity in net income of unconsolidated affiliate (3,163) (3,162)
28 Other 38 11
------ ------
29 Income before income taxes 73,479 58,424
30 Income tax expense 25,946 22,026
------ ------
31 Net income $ 47,533 $ 36,398
======= =======
32
----- -----
33 Net income per share, diluted $1.00 $0.84
===== =====
34
35 Weighted average shares, diluted 47,724 43,269
EZCORP, Inc.
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)
------------------------------------------------------
As of June 30,
2009 2008
---- ----
1 Assets:
2 Current assets:
3 Cash and cash equivalents $ 46,546 $ 29,812
4 Pawn loans 94,648 68,022
5 Payday loans, net 7,649 6,598
6 Pawn service charges receivable, net 16,693 10,061
7 Auto title loans, net 1,126 -
8 Auto title loan finance charges receivable, net 352 -
9 Signature loan fees receivable, net 5,105 5,086
10 Inventory, net 57,141 39,444
11 Deferred tax asset 15,809 9,007
12 Federal income taxes receivable - 454
13 Prepaid expenses and other assets 14,866 5,622
------- -------
14 Total current assets 259,935 174,106
15
16 Investment in unconsolidated affiliate 34,784 37,248
17 Property and equipment, net 49,752 38,661
18 Deferred tax asset, non-current 9,090 5,620
19 Goodwill 100,742 24,779
20 Other assets, net 17,892 5,585
-------- --------
21 Total assets $472,195 $285,999
======== ========
22 Liabilities and stockholders' equity:
23 Current liabilities:
24 Current maturities of long-term debt $ 10,000 $ -
25 Accounts payable and other accrued expenses 33,958 24,120
26 Customer layaway deposits 3,603 2,254
27 Federal income taxes payable 1,988 -
------ ------
28 Total current liabilities 49,549 26,374
29
30 Long-term debt, less current maturities 27,500 -
31 Deferred gains and other long-term liabilities 3,352 2,909
32 Total stockholders' equity 391,794 256,716
-------- --------
33 Total liabilities and stockholders' equity $472,195 $285,999
======== ========
34
35 Pawn loan balance per ending pawn store $ 227 $ 210
36 Inventory per ending pawn store $ 137 $ 122
37 Book value per share $ 8.05 $ 6.19
38 Tangible book value per share $ 5.65 $ 5.50
39 Pawn store count - end of period 417 324
40 Signature loan store count - end of period 480 461
41 Shares outstanding - end of period 48,652 41,441
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts)
Three months ended U.S. Pawn Empeno EZMONEY
June 30, 2009: Operations Facil Operations Consolidated
---------- ----- ---------- ------------
1 Revenues:
2 Sales $78,519 $2,790 $ - $81,309
3 Pawn service charges 31,409 1,471 - 32,880
4 Signature loan fees 523 - 30,292 30,815
5 Auto title loan fees 430 - 600 1,030
6 Other 1,706 34 - 1,740
------- ----- ------ -------
7 Total revenues 112,587 4,295 30,892 147,774
8
9 Cost of goods sold 49,157 1,808 - 50,965
10 Signature loan bad debt 237 - 8,381 8,618
11 Auto title loan bad debt 30 - 74 104
------ ----- ------ ------
12 Net revenues 63,163 2,487 22,437 88,087
13
14 Operations expense 37,719 1,441 14,673 53,833
------- ------ ------ -------
15 Store operating income $25,444 $1,046 $7,764 $34,254
======= ====== ====== =======
16
17 Pawn store count
- end of period 370 47 - 417
18 Signature loan store count
- end of period 6 - 474 480
19
20 Three months ended June 30, 2008:
21 Revenues:
22 Sales $51,799 $1,836 $ - $53,635
23 Pawn service charges 21,378 1,313 - 22,691
24 Signature loan fees 650 - 30,573 31,223
25 Auto title loan fees - - - -
26 Other 521 - - 521
------ ----- ------ -------
27 Total revenues 74,348 3,149 30,573 108,070
28
29 Cost of goods sold 30,301 1,159 - 31,460
30 Signature loan bad debt 202 - 8,343 8,545
31 Auto title loan bad debt - - - -
------ ----- ------ ------
32 Net revenues 43,845 1,990 22,230 68,065
33
34 Operations expense 24,831 1,065 13,977 39,873
------- ----- ------ -------
35 Store operating income $19,014 $925 $8,253 $28,192
======= ==== ====== =======
36
37 Pawn store count
- end of period 294 30 - 324
38 Signature loan store count
- end of period 6 - 455 461
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts)
Nine months ended U.S. Pawn Empeno EZMONEY
June 30, 2009: Operations Facil Operations Consolidated
---------- ----- ---------- ------------
1 Revenues:
2 Sales $227,494 $7,408 $ - $234,902
3 Pawn service charges 88,558 4,219 - 92,777
4 Signature loan fees 1,766 - 96,643 98,409
5 Auto title loan fees 991 - 675 1,666
6 Other 4,866 35 - 4,901
------- ------ ------ -------
7 Total revenues 323,675 11,662 97,318 432,655
8
9 Cost of goods sold 143,167 4,649 - 147,816
10 Signature loan bad debt 581 - 22,593 23,174
11 Auto title loan bad debt 72 - 81 153
------- ----- ------ -------
12 Net revenues 179,855 7,013 74,644 261,512
13
14 Operations expense 102,764 4,024 45,167 151,955
------- ------ ------- --------
15 Store operating income $77,091 $2,989 $29,477 $109,557
======= ====== ======= ========
16
17 Pawn store count
- end of period 370 47 - 417
18 Signature loan store count
- end of period 6 - 474 480
19
20 Nine months ended June 30, 2008:
21 Revenues:
22 Sales $165,749 $4,723 $ - $170,472
23 Pawn service charges 64,089 3,295 - 67,384
24 Signature loan fees 2,131 - 92,786 94,917
25 Auto title loan fees - - - -
26 Other 1,224 4 - 1,228
------- ----- ------ -------
27 Total revenues 233,193 8,022 92,786 334,001
28
29 Cost of goods sold 98,853 2,879 - 101,732
30 Signature loan bad debt 741 - 24,106 24,847
31 Auto title loan bad debt - - - -
------- ----- ------ -------
32 Net revenues 133,599 5,143 68,680 207,422
33
34 Operations expense 72,831 2,810 41,667 117,308
------- ------ ------- -------
35 Store operating income $60,768 $2,333 $27,013 $90,114
======= ====== ======= =======
36
37 Pawn store count
- end of period 294 30 - 324
38 Signature loan store count
- end of period 6 - 455 461
SOURCE EZCORP, Inc.
